U.S. hits loan modification target early – Sacramento Business Journal:
More than 500,000 troubled home loans have entered trial modification programs, the Obama administration announced Thursday.
Federal officials have recently stepped up pressure to modify troubled loans after criticism during the summer that banks and other loan servicers were dragging their feet adjusting loan terms for borrowers in danger of default. The government had given servicers a deadline of Nov. 1 to get 500,000 eligible borrowers into such programs, where payments are reduced to not exceed 31 percent of the borrower’s pre-tax income.
An estimated 16 percent of troubled borrowers — defined as those at least 60 days delinquent — have been placed into trial modifications.
But performance varies widely among banks, according to federal statistics..
The percentage of eligible loans placed in trial modification among major California banks:
Citigroup — 33 percent
JPMorgan Chase — 27 percent
Wells Fargo — 20 percent
Bank of America — 11 percent
U.S. Treasury Secretary Timothy Geitner said loan modifications are now running at a faster pace than foreclosure sales.